deutsche bank media, telecom & business services … · experienced management team with a...

0 © 2017 On Assignment, Inc. All rights reserved.

Deutsche Bank

Media, Telecom & Business Services Conference

March 2018

Peter Dameris, CEO

Ted Hanson, President

1 © 2017 On Assignment, Inc. All rights reserved. 1

Safe Harbor

This presentation contains “forward-looking statements” within the meaning of Section 21E of the

Securities Exchange Act of 1934, as amended, and involve a high degree of risk and uncertainty.

Forward-looking statements include statements regarding the Company's anticipated future

financial and operating performance. All statements in this presentation, other than those setting

forth strictly historical information, are forward-looking statements. Forward-looking statements

are not guarantees of future performance, and actual results might differ materially. In particular,

the Company makes no assurances that estimates of revenues, gross margin, SG&A, Adjusted

EBITDA, cash flow and other financial metrics will be achieved. Further, the Company makes no

assurances or guarantees: i) that the announced transaction with ECS Federal, LLC will be

completed; ii) that the assumptions made in determining the value of the transaction will be

realized; iii) that the Company will be able to finance the potential transaction; or iv) that 2018

preliminary financial estimates for ECS will be realized. Factors that could cause or contribute to

such differences include actual demand for our services, our ability to attract, train and retain

qualified staffing consultants, our ability to remain competitive in obtaining and retaining staffing

clients, the availability of qualified temporary and permanent placement professionals,

management of our growth, continued performance of our enterprise-wide information systems,

and other risks detailed from time to time in our reports filed with the Securities and Exchange

Commission, including our Annual Report on Form 10-K for the year ended December 31, 2017,

as filed with the SEC on March 1, 2018. We specifically disclaim any intention or duty to update

any forward-looking statements contained in this presentation.

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Positioned to Capitalize on $150B Market

Large and Growing Provider of Professional / IT Services via

Contingent Labor/Shared Delivery Model

Differentiated Platform Featuring IT, Digital, Creative,

Engineering and Scientific Skill Sets

Attractive Financial Characteristics – Strong Operating

Margins and Substantial Free Cash Flow Generation

Rate of Adoption of the contingent labor/shared

delivery model continues to expand

Experienced Management Team with a Proven

Track Record to Execute On Assignment’s Growth

Strategy

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2

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4

5

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Key investment highlights

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77.6%

22.4%

APEX

LTM Revenues: $2.04 billion

Gross Margin: 29.8%

OXFORD

LTM Revenues: $589 million

Gross Margin: 41.4%

1 LTM as of December 31, 2017. 2 As of Q4 2017.

Large and Growing Provider of Professional Services

Broad Capabilities • ASGN’s Professional Services and Staffing Solutions

capabilities delivers IT, Creative, Digital, Engineering and

Scientific talent to our clients via a flexible labor pool

• “Light deliverable” model involves shared responsibility

between the service provider and the customer

Established Footprint • 2,505 staffing consultants in 156 branch offices in North

America and Europe2

• Delivers fast, quality sales and fulfillment services

Large and Growing End Markets • The U.S. market for Professional / IT Services, including

staffing, measures ~$275B

• Via ASGN’s Contingent Labor/Shared Delivery model,

addressable market ~ $150B

Attractive Business Model • High operating efficiency with strong conversion of free cash

flow

• One of the highest gross margins in the staffing industry –

32.4%1

• Professional Services Solutions deliver highly attractive

financial characteristics compared with staffing solutions

LTM

REVENUES:

$2.63 Billion1

GROSS MARGIN:

32.4%1

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Technology & Other

Clinical / Scientific

Telecommunications

Healthcare / Pharmaceuticals

IndustrialA&D / Gov't / Business Services

Financial

Digital / Creative

SEGMENT KEY STATISTICS2

Average # of Customers: 3,613

Average Bill Rate: $57

Top 10 Customers as a % of Revenues: 26.5%

Geographic Footprint

U.S. and Canada

Provides mission critical IT skill sets

• 200+ National Accounts with a presence in 65 markets

• Service clients in IT, business services, financials,

healthcare, pharmaceuticals, government services, consumer

industrials and telecommunications industries

• Approximately 13,500 contract professionals at ~770 clients

• Average bill rate of $61 an hour

Provides scientific skill sets • Service clients in the biotechnology, pharmaceutical, food &

beverage, medical devices, personal care, chemical,

automotive, educational and environmental industries

• Approximately 2,200 contract professionals at ~600 clients


Provides creative/digital professionals

• Supports creative and marketing departments for over 200 of

the Fortune 1000 listed companies

• Large, attractive end markets; spans virtually all industries

including retail, financial services, automotive, entertainment &

leisure, and consumer

• Approximately 3,500 contract professionals at ~2,300 clients


1 LTM as of December 31, 2017.

2 As of Q4 2017.

APEX Segment Overview

LTM

REVENUES:

$2.04 Billion1

GROSS MARGIN:

29.8%1

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Enterprise Applications

IT Infrastructure

SW/HW

Engineering

Reg & Comp

Clinical/Scientific

Healthcare Technology

Permanent Placement

LTM

REVENUES:

$589 Million1

GROSS MARGIN:

41.4%1

SEGMENT KEY STATISTICS2

Average # of Customers: 1,036

Average Bill Rate: $101

Top 10 Customers as a % of Revenues: 10.7%

Geographic Footprint

U.S. and Europe

Provides high-end IT & engineering professionals • Minimal client and industry business concentration; no customer

accounts for more than 3% of sales

• Significantly higher success rate filling engagements than

competitors

• Average bill rate of $117 per hour

Provides permanent placement staffing • Dedicated perm placement practice with automated client

generation, lead distribution, and candidate sourcing supported

by global cloud solution

• 2.6 million opt-in recipients of job alerts

• 960,000 website visitors per month

• 230,000 web-based job applications received per month

Provides clinical & scientific skill sets in Europe • Chemists, clinical research associates, clinical lab assistants,

engineers, biologists, biochemists, microbiologists, and other

skilled scientific professionals

• European operations in the Netherlands, Belgium, Spain and

U.K.

• Approximately 500 contract professionals at ~200 clients


1 LTM as of December 31, 2017.

2As of Q4 2017.

OXFORD Segment Overview

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Our 2,505 staffing consultants in 156 branch offices provide staffing solutions for

in-demand, skilled talent

Established Domestic Footprint with Significant Scale

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In our pursuit of “talent for the digital worldTM” On Assignment is positioned to continue as a highly respected and

highly profitable organization. Our strategic advantage not only comes from our 30 years of experience and

connections, but also from our unmatched ability to provide what companies need most, today and in the future

– the right people, with the right skills.

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Experienced Management Team A Proven Track Record to Execute On Assignment’s Growth Strategy

Peter Dameris CEO 20 years in industry 14 years with ASGN

Ted Hanson President, On Assignment 17 years in industry 5 years with ASGN

Rand Blazer President, Apex Systems 32 years in industry 5 years with ASGN

Edward Pierce Executive VP & CFO 16 years CFO experience 11 years with ASGN

James Brill Senior VP, CAO & Treasurer 24 years CFO experience 11 years with ASGN

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1992

On Assignment initial

public offering

2007

Expanded into Professional Temporary IT Staffing Solutions

• Acquired Oxford

• Generating $50 Million in FCF

2012

Comprehensive Temporary IT Staffing Provider

• Acquired Apex Systems

• Generating $700 Million Revenue

• Achieved $1 Billion in Sales

• On Assignment transfers from NASDAQ to NYSE

2015

Professional Digital/Creative Solutions

• Acquired Creative Circle

2004

Comprehensive Scientific Staffing

Provider

• Peter Dameris appointed CEO

• Implemented Revitalization Plan

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A History Of Persistent Growth

Scientific Staffing

Professional / IT

Services Focus

2013

Expanded Permanent IT

Staffing capabilities

• Acquired CyberCoders

Expanded Staffing

Solutions 1985

On Assignment Founded

2011

Expanded Pharmaceutical


• Acquired Valesta

2017

Expanded Clinical/Scientific


• Acquired Stratacuity

2018

Entrance into the Government

Services sector

• Acquires ECS Federal

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Go-To-Market Strategy

DELIVERY MODELS RESPONSIBILITY FOR PROJECT OVERSIGHT

DELIVERABLES ASSIGNED TO SERVICE PROVIDER COST OF USING SERVICE PROVIDER

Staff Augmentation

Statement of Work

Professional Services

Staff Augmentation Statement of Work Professional Services

Customer Service Provider & Customer

Service Provider

Statement of Work Professional Services

Low

Medium

Highest None

Heavy to many

Staff Augmentation

TOTAL ADDRESSABLE MARKET

$150B

ESTIMATED MARKET SIZE Staffing and Professional Services (IT, Engineering, Creative and Scientific)

ASGN ADDRESSABLE MARKET

Temporary Staffing On Assignment Model Professional Services

$50B1 100B2

$275B

Staffing & Professional Services Overview

+ = $150B

1 Staffing Industry Analysts (September 2017) 2 IBISWorld, AdAge and third party independent research

Offshore

None

Moderate to few

Heavy to many

Heavy to many

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Staff Augmentation Contingent labor pool

Statement of Work Contingent labor pool

Professional / Consulting Full time employees

Offshore Full time employees located outside the US

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ASGN SERVICE OFFERINGS

“With over 30 years in industry, our strong position as an

experienced leader in technology, life sciences and creative solutions

is a key differentiator for On Assignment.”

Peter T. Dameris

CEO

IT

$31 Billion

Clinical

/Scientific

$2.5 Billion

Creative /

Marketing

$8.5 Billion2 Engineering

$8 Billion

ASGN Operates In The Most Attractive End Markets

2017 Estimated Market Size1,2

1 Staffing Industry Analysts Insight: Staffing Industry Forecast (September 2017). 2 3rd party independent research.

IT


Digital / Creative

IT

Engineering


Perm Placement

Professional /

IT

Services

$100 Billion2

(addressable)

ADDRESSABLE MARKET SIZE

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HIGHLIGHTS

Professional Services Growth Drivers

• Constant technology change and specialization

• Growth in IT spending

• Supply/demand imbalance for IT professionals

• Increasing compliance requirements in financial services and healthcare industries

• Immigration reform would drive demand for domestic labor

• Changing business model for resource use by CIOs

Financial Services

Healthcare Digitalization

Mobile / Applications /

Cloud Infrastructure

Social Media

Digital/Creative

• Technology has

transformed day-to-day

operations in the finance

sector

• Consolidation amongst

industry players

continues

• Regulation and

innovation

• Global financial markets

are increasingly

intertwined

• Healthcare IT is an

evolving industry

• IT staffing will be integral

to catalogue, cleanse and

support system

development

• Conversion to EHR

projected to save

Medicare and private

payers $50+ billion per

year

• Mobile adoption

continues to increase

rapidly

• Widespread smartphone

adoption

• Need for mobile app

developers

• Rapidly evolving

customer needs

• Cyber security threats

are increasing

• Extends reach to

customers and potential

employees

• Corporations are seeking

programmers fluent in

social media platform

development

• Extends brand beyond

traditional space

• Many marketing and

creative functions require

specific IT competencies

• Digital is the fastest

growing segment of the

market and an area

where companies

struggle to source talent

EMERGING TRENDS

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31%

6%6%

23%

35%

The “Sharing Economy”

Contingent labor1 is a significant & growing portion of the U.S. workforce

From 2015 to 2017, the number of diversified workers has increased from 14.1 mm to

19.8 mm professionals, largely due to increased participation in the “sharing economy”.

36% of the 2017 U.S. workforce

57m represent

1Contingent labor is defined as individuals who have engaged in supplemental, temporary, project – or contract-based work within the past 12 months.

Source: “Freelancing in America,” an online survey of U.S. adults who have done paid work in the past 12 months. Commissioned by Freelancer’s Union and Upwork and

conducted by independent research firm Edelman Berland.

Independent Contractors

Don’t have an employer…

do freelance, temporary,

or supplemental work on a

project-by-project basis 17.7m people

Moonlighters

Professionals with a primary,

traditional job who also moonlight 13.0m

Freelance Business Owners

Business owners with

1 employees 3.4m people

Temporary Workers

Single employer, client, job,

or contract project where

employment is temporary 3.4m

Diversified Workers

Multiple sources of

income; mix of traditional

and freelance work 19.8m

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Fractionalization of Human Capital: Staffing Firms vs. Independent Freelancers

Advantages of utilizing staffing agencies

• Firms are best able to leverage the source of quality

consultants with the skills, experience and pay rate that

meets clients’ needs

• Firms can ensure compliance with federal and state

employment laws, thereby freeing clients from the risks

associated with hiring contingent labor directly

• Avoid employee misclassification and reduce the risk

of lawsuits challenging the classification of a group of

workers paid on a 1099 basis

• Enhance security by delivering vetted technical resources

that can present reliable work backgrounds

• Savings:

• Time. Firms hours cover finding consultants and

screening them as well as processing payroll,

benefits and taxes

• Cost Reduction. Firms finance the bulk of recruitment

processes and pay most fees for background checks

10-Year Plan:

Buyers’ plan for various types of labor force

1 Source: Staffing Industry Analysts 2017 Report

By working with a trustworthy staffing firm, companies (buyers) can reduce time, cost and risk – and

take advantage of top talent that meets all compliance requirements

Net

Increase-Decrease1

Outsourced Workers 41%

SOW Consultants 39%

Freelancers 32%

Agency Temporary Workers 23%

Internal Temporary Workers 13%

Independent Contractors 9%

Part-time Employees 7%

Full-time Employees -24%

N=180

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Net benefit to U.S. IT Staffing Industry

• Increases demand for domestic labor

• Increase in bill rates and pay rates

• Staff augmentation delivery/deployment

model gains market share from offshore

companies

Evolving Labor Landscape

• Modify lottery to a merit-based system

• Longer turn processing

• Scrutinize offshore IT service companies

• Inspect companies with more than 15%

of workforce on visas

Source: “Freelancing in America,” an online survey of 7,107 U.S. adults who have done paid work in the past 12 months. Commissioned by Freelancer’s Union and

Upwork and conducted by independent research firm Edelman Berland from July 30 to August 14, 2015.

CONTINGENT LABOR1 IS A SIGNIFICANT & GROWING PORTION OF THE U.S. WORKFORCE

• 54 million people, representing 34% of the 2015 U.S. workforce

• From 2014 to 2015, the number of diversified workers has increased from 9.3 mm to 14.1 mm

professionals, largely due to increased participation in the “sharing economy”

Trump administration plans to discourage technology companies from hiring low-wage foreign workers; frees up H-1B

Visas for higher skilled talent

• Reduce lower IT technologists seeking

U.S. opportunities

• Push out offshore IT service companies

• Higher wages for U.S. tech employees

Root out H-1B Visa Abuse

Reduce Foreign Competition

Net benefit to U.S. IT /

Professional Services Industry

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Human Cloud and the Gig-Economy

The “Human Cloud” is an emerging set of online/digital platforms that enable purchasers and

talent to manage and complete work arrangements

Human Cloud companies generally: • Facilitate peer-to-peer transactions through the internet or internet-enabled devices (e.g. smartphone

“apps”)

• Rely on user-based ratings

• Offer talent flexibility in deciding working hours or times

• Typically expect talent to supply their own equipment to complete work (e.g. computer, software, car, tools,

etc.)

• Manage the relationship from sourcing through payment via the platform

Examples of such Human Cloud companies are:

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Human Cloud and the Gig-Economy

Though Human Cloud companies are frequently mentioned in the media, they pose little threat to On Assignment’s Professional services

Key Issues Affecting The Human Cloud:

• Large organizations, which make up the majority of the B2B Human Cloud, are reluctant to embrace work performed remotely

• B2B Human Cloud vendors are unable to solve multiple organizational workforce problems

• Although total Human Cloud revenue nearly doubled in size last year, much is due to a few key players in the B2C (i.e. Uber, Lyft, etc.) market rather than Human Cloud businesses as a whole

• Legal challenges around worker classification have plagued the Human Cloud market

• Personal and cyber-security issues associated with recruiting talent via the Human Cloud

• Many governments have not yet updated legislation to address the boom in the Gig-Economy

• Users of Human Cloud services are individual people unlike OA’s giant client database

• Many Human Cloud companies are not yet profitable such as Uber and Lyft

• There has been a significant drop in the number of Human Cloud companies started in the last 3 years

• Raising capital has become increasingly difficult, creating further obstructions for startups and unprofitable firms

• The total market size of the Human Cloud is a fraction of other services in the Gig-Economy and the majority of the work is performed by off-shore workers

• Cloud Labor spend is less than 0.5% of total program spend at large enterprise clients

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ECS Federal Company Overview

• ECS Federal, one of the largest privately held government services providers (82% prime contracts),

delivers cyber security, cloud, DevOps, IT modernization and advanced science and engineering solutions

• ECS has well established positions on critical IT systems of national importance which provide unmatched

customer access and unique visibility into future technology transformation initiatives

– Engagements are generally longer in duration than management consulting-led models (e.g. PwC,

McKinsey) and are among the most highly differentiated in the sector from a technical standpoint

– In some cases (e.g., NETCOM), ECS is responsible for the design, build and operation of IT systems that

have mission-critical functionality for demanding customers

– Operates four business units: 1) Mission Solutions; 2) Enterprise Solutions; 3) Cyber and Health IT;

4) Advanced Science and Engineering

– Primary capabilities include 1) Cyber Security and Infrastructure Support; 2) Agile Software Development

and Cloud Solutions; 3) Advanced Science, Engineering and Program Support

• Strong positions on critical IT systems of national importance which provide customer access and unique

visibility into future technology transformation initiatives

• ~2,300 employees with deep mission knowledge and a diverse set of domain experience as well as 1,000+

unique certifications and accreditations

– ~1,500 cleared employees

• 2017 Revenue and adjusted EBITDA of $586 million and $68 million, respectively

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ECS Federal Business Units

Mission Solutions Enterprise Solutions

Cyber & Health IT Advanced Science & Engineering

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• Focuses on complex technical solutions, especially for the

Department of Defense, National Security and Intelligence

Community customers

• Particularly fixed-priced and managed service solutions

• Commercial managed cyber clients

• Top customers include US Army, US Marine Corps, US Navy,

US Air Force, DHS, Office of Secretary of Defense,

USTRANSCOM and DHA

• Strategic partnerships with industry-leading manufacturers,

providing lead generation, special pricing and integrated

delivery teams

• Delivers advanced technical solutions primarily in the civilian

sector

• Strong focus on cloud and managed service solutions

• Natural synergy with ECS’ Software Engineering and IT

Operations services

• Top customers include US Postal Office, Department of

Labor, Health and Human Services, DoJ / FBI, Department of

Energy, General Accounting Office and Department of

Agriculture

• Key partnerships with Microsoft, AWS, IBM and Gimmal

• Delivers high-quality personnel that provide first-class

engineering, information technology and program analysis

support to Department of Defense and federal civilian

programs

• Works closely with the government’s own engineering and

acquisition staff members to advance their respective

missions

• Delivers high-performance, high-fidelity radar cross section

systems and flight termination systems

• Top customers include US Army, Missile Defense Agency,

EPA, US Navy and NOAA

• Focuses on end-to-end cyber security design, engineering,

deployment and sustainment

• Capabilities include cyber engineering, network engineering

and enterprise solutions and engineering & deployment

• Top customers include Defense Health Agency, Space &

Naval Warfare Systems Center Atlantic and Navy Bureau of

Medicine and Surgery

• Global infrastructure supports 220,000+ users and over 700

facilities worldwide

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ECS Federal Capabilities

Cyber Security &

Infrastructure Support

Agile Software Development

& Cloud Solutions

Advanced Science, Engineering

& Program Support

• Delivers advanced cyber security

services and solutions to US public

sector, Department of Defense and

Fortune 500

• Architect and deploy advanced

endpoint Security-as-a-Service

solutions

• Provides application and infrastructure

support to worldwide systems

• Provides Continuous Diagnostics of

Mitigation for Department of Homeland

Security and .gov domains and

performs advanced security,

engineering, assessments and

authorizations

• 643 billable employees

• Recognized cloud solutions leader

deploying cloud solutions across the

AWS and Microsoft Azure / Office 365

platforms within both US public sector

and commercial markets

• Develops artificial intelligence to

sense, detect, identify, track and

geolocate high-value targets

• Develops mission critical enterprise-

level solutions using agile and

development operations

methodologies

• Performs agency-wide migration of

data and operations to the cloud


• Advanced engineering services,

including systems integration, analysis

for NextGen weapons systems and

ship, aircraft and drone design and

maintenance

• Delivers high-performance, high-

fidelity radar cross-section systems,

flight termination systems and

classified solutions

• Delivering the first Flight Termination

System upgrade at the Department of

Defense’s largest missile range

• Supports shipbuilding and marine

operations


$196 Million 2017E Revenue



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Compelling Strategic Combination

ECS provides a comprehensive platform to expand into the broader IT services market

and is aligned to robust and growing areas of the federal budget

• Improving outlook for increased spending in defense and not operating under continuing resolutions

• Government revenue base tends to be more resistant to downturns, especially in the areas ECS focuses

on, mitigating On Assignment’s risk during a correction in the economy

• Past performance and certifications allow for bids on large, complex, competitive long-term contracts as

well as the ability to capture limited competition procurements, providing ample room for growth

• Strong platform in a highly fragmented market with a number of extremely small players

ECS’ capabilities complement and elevate On Assignment’s highly technical IT offerings

• Diversifies On Assignment’s client base into the large and attractive federal government end market

• Adds talented workforce with over ~1,500 cleared employees with deep technical and domain expertise

that reinforce On Assignment’s positioning as a “premium” human capital provider

• Combination with On Assignment enhances ECS’ long-term expansion strategy into the private sector as

well as other areas of the federal government, such as intelligence and homeland security

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Contingent Labor$50

IT & Professional

Services$100

Federal Civilian IT & Professional

Services$65

Federal Defense IT & Professional

Services$64

ECS Significantly Expands Addressable Market

Entry into Federal IT and professional services demonstrates On Assignment’s

commitment to executing domestic, non-commodity technology services opportunities

• Provides On Assignment with access to the ~$129 billion Federal IT and professional services sector

• The Federal IT & Professional Services sector consists of both Civilian and Defense and is estimated to be

$65 and $64 billion, respectively in 2018 and is larger than On Assignment’s markets

• Nearly doubles On Assignment’s addressable market to $279 billion and ECS’ highly specialized skill sets

reinforce the Company’s positioning as a premium human capital provider and complements its highly

technical IT offerings

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Current Addressable Market Pro Forma Addressable Market

Note: Staffing includes the IT/Engineering, Creative/Marketing and Clinical/Scientific markets

Source: Staffing Industry Analysts (September 2017), IBIS World, AdAge and third party independent research

TAM: $150 Billion

($ in Billions)

TAM: $279 Billion

($ in Billions)

New

Addressable

Market

IT & Professional

Services$100

Contingent Labor$50

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On Assignment & ECS Federal – A Unique Combination

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55,4001

Contract

Employees

14,500 Clients

156 Branch Offices

$129 Billion End Market

82% Prime Contract

Revenue

$150 Billion End Market

$2.6 Billion 2017 Revenue

3,800 Internal

Employees

• On Assignment and ECS Federal will create a unique platform, offering an integrated suite of human capital solutions and

expertise in the IT & Professional Services sector

• ECS Federal has developed long relationships with key Government contractors. With On Assignment’s ability to find

cleared personnel, ECS will enhance positioning for upcoming contract bids and recompetes

– One of the largest inhibitors of growth in the Federal services sector is timely finding and placing technical talent.

Therefore, On Assignment’s recruiting capabilities will enhance ECS’ performance and value proposition versus

Government services peers

– On Assignment has 22,000+ contract professionals on billing on a daily basis; ~1,400 currently cleared

• ECS Federal has developed differentiated expertise in highly transferable domains that would be applicable for On

Assignment’s Fortune 1000 client base

– Given the increased frequency and complexity, cyber security, for instance, is a top Fortune 1000’s technology priority

– ECS’ domain expertise and first-hand experience are invaluable and will position the combined company well to support

commercial engagements in cyber security, artificial intelligence and biometrics

~2,300 Highly Skilled

Employees


$1.6 Billion Total Backlog

$9.8 Billion Opportunity Pipeline

(Unfactored)

1 Total number of contract professionals placed on assignment during each year that are considered employees; this number does not include employees of our subcontractors

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Financials

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Summary Operating Results

1 Adjusted EPS, a non-GAAP measurement, is calculated by adjusting GAAP EPS for (i) after-tax acquisition, strategic planning and integration expenses and (ii)

amortization of identifiable intangible assets.

2 Does not include the “Cash Tax Savings on Indefinite-lived Intangible Assets.” These savings total $6.8 million each quarter, or $0.13 per diluted share, and represent the

economic value of the tax deduction that we receive from the amortization of goodwill trademarks.

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(In thousands, except per share amounts) Quarter Ended December 31, LTM Ended December 31,

2017 2016 Chg. 2017 2016 Chg.

Revenues:

Assignment 647,446 591,958 9.4% 2,496,314 2,312,270 8.0%

Permanent Placement 31,589 28,925 9.2% 129,610 128,143 1.1%

679,034$ 620,884$ 9.4% 2,625,924$ 2,440,413$ 7.6%

Gross profit 220,677 198,195 11.3% 850,073 795,183 6.9%

SG&A expenses 151,447 142,630 6.2% 591,893 565,829 4.6%

Amortization of intangible assets 8,433 9,710 -13.2% 33,444 39,628 -15.6%

Income from continuing operations:

GAAP 67,377 24,060 180.0% 157,874 97,196 62.4%

Adjusted1,2

75,977 34,296 121.5% 193,832 139,570 38.9%

Diluted earnings per common share:

GAAP 1.28$ 0.45$ 184.4% 2.97$ 1.81$ 64.1%

Adjusted1,2

1.44$ 0.64$ 125.0% 3.64$ 2.60$ 40.0%

Adjusted EBITDA2

82,946 70,725 17.3% 311,436 285,033 9.3%

Margins:

Gross 32.5% 31.9% 0.6% 32.4% 32.6% -0.2%

SG&A expenses 22.3% 23.0% -0.7% 22.5% 23.2% -0.6%

Adjusted EBITDA 12.2% 11.4% 0.8% 11.9% 11.7% 0.2%

Conversion of gross profit into adjusted EBITDA 37.6% 35.7% 1.9% 36.6% 35.8% 0.8%

Number of billable days 60.0 60.2 (0.2) 249.3 250.5 (1.2)

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Selected Cash Flow and Balance Sheet Data

1 Long-term debt is net of unamortized deferred loan costs.

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($'s in millions) Three Months Ended December 31, LTM Ended December 31,

Cash Flows Data: 2017 2016 2017 2016 Chg. %

Adjusted EBITDA 82.9$ 70.7$ 311.4$ 285.0$ 26.4$ 9.3%

Cash Flows from Operating Activities 58.3 56.4 196.4 199.3 (2.9) -1.4%

Capital Expenditures 6.2 6.6 24.3 27.1 (2.9) -10.6%

Free Cash Flow 52.0 49.8 172.2 172.2 (0.0) 0.0%

Free Cash Flow as a Percent of:

Revenues 7.7% 8.0% 6.6% 7.1% -7.1%

Adjusted EBITDA 62.7% 70.5% 55.3% 60.4% -8.5%

Debt Repayment 35.5 19.0 68.0 118.0 (50.0) -42.4%

Cash Paid to Repurchase Shares 0.0 20.5 60.1 43.1 17.0 39.5%

Balance Sheet Data: December 31, December 31,

2017 2016

Cash and Cash Equivalents 36.7$ 27.0$

Working Capital 332.8 275.0

Long-term Debt1

575.2 640.4

Stockholders' Equity 991.4 868.9

Leverage Ratio (debt to trailing 12-months EBITDA) 1.89x 2.32x


Financial Estimates for Q1 2018

1 Q1 estimates include $4.9 million in revenues from StratAcuity which was acquired on August 8, 2017. On a same “Billable Days” basis, our implied year-over-year revenue growth rate excluding StratAcuity

for the first quarter ranges from 6.8 to 8.4 percent. 2 These estimates do not include acquisition, integration, or strategic planning expenses, other than the $10.0 million in estimated acquisition expenses related to the pending acquisition of ECS. 3 Adjusted Net Income, a non-GAAP financial measure, is defined as net income adjusted for, (i) acquisition, integration and strategic planning expenses and (ii) amortization of identifiable intangible assets.

Does not include the “Cash Tax Savings” on Indefinite-lived Assets.” These savings total $4.6 million per quarter, or $0.09 per diluted share and represent the economic value of the tax deduction that we

received from the amortization of goodwill and trademarks. 4 Adjusted EBITDA, a non-GAAP financial measure, is defined as EBITDA (earnings before interest, income taxes, depreciation and amortization) adjusted for, among other things, (i) equity-based

compensation expense and (ii) acquisition, integration and strategic planning expenses.

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(In millions, except per share amounts)

Low High

Revenues1

$672.0 $682.0

Year-over-year growth rate 7.3% 8.9%

Same billable day basis 7.6% 9.2%

Gross Margin 31.5% 31.8%

SG&A Expenses2

$164.7 $166.9

Amortization of Intangible Assets $7.6 $22.55

Net Income:

GAAP2

$24.4 $26.6

Adjusted3

$39.0 $41.2

EPS (Diluted):

GAAP2

$0.46 $0.50

Adjusted3

$0.74 $0.78

Adjusted EBITDA4

$69.0 $72.0

Diluted Shares 52.8

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Adjusted EPS Estimates for Q1 2018

Table above shows adjustments to GAAP Net Income to calculate Adjusted Net Income

1. Amortization of identifiable intangible assets (e.g., customer/contractor relationships, non-compete agreements, etc.) related to the acquired businesses.

2. Income taxes (assuming a 26.5 percent marginal rate) on the portion of amortization of identifiable intangible assets that are not deductible for income tax purposes

(mainly amortization associated with the CyberCoders acquisition that the Company was not able to step-up the tax basis in those acquired assets for tax purposes).

3. Does not include the “Cash Tax Savings on Indefinite-lived Intangible Assets.” These savings total $4.6 million each quarter, or $0.09 per diluted share, and

represent the economic value of the tax deduction that we receive from the amortization of goodwill and trademarks.

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(In millions, except per share amounts)

Low High

Net Income - GAAP Basis 24.4$ 26.6$

Add-backs:

Amortization of identifiable intangible assets1

7.6 7.6

Estimated acquisition expenses related to the pending acquisition of ECS 10.0 10.0

Tax effect on estimated acquisition expenses (2.7) (2.7)

Income taxes on amortization for financial reporting purposes

not deductible for income tax purposes2

(0.3) (0.3)

Net Income - As Adjusted3

39.0$ 41.2$

Earnings Per Share (Diluted):

GAAP Basis 0.46$ 0.50$

As Adjusted 0.74$ 0.78$


2018 Financial Estimates for ECS

1 As reported in our Q4 2017 press release. 2 Includes $14.1 million in depreciation and $3.3 million in stock-based compensation expense. 3 Does not include the “Cash Tax Savings on Indefinite-lived Intangible Assets.” These savings are estimated to be approximately $9.0 million annually over 15 years and represent the economic value of the tax

deduction that we receive from the amortization of goodwill and trademarks. 4 Adjusted EBITDA, a non-GAAP financial measure, is defined as EBITDA (earnings before interest, income taxes, depreciation and amortization) adjusted for equity-based compensation expense.

(In millions)1

Low High

Revenues $620.0 $640.0

Operating Costs and Expenses2

$567.3 $583.9

Amortization of Intangible Assets $45.0 $42.0

Net Income:

GAAP ($19.0) ($14.3)

Adjusted3

$26.0 $27.7

Adjusted EBITDA4

$70.0 $73.5

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Financial Targets for 2018 (final year of 5-Year Strategic Plan) published in March 2014

• Revenues of $3 billion ($1.7 billion for 2013, the Base Year of the 5-Year Plan)

– Financial target implied 5-year revenue CAGR of 11.8%

– Assumed year-over-year organic growth of 10 percent, and contribution of approximately $240 million from acquisitions

• Gross margin of 31 to 32 percent (31.9 percent for 2013)

– Assumed revenue mix shift toward higher volume / lower gross margin business (i.e., higher growth in Apex segment)

– Compression in margin caused by shift in mix of revenues to be partially offset by higher mix of permanent placement

revenues

• Adjusted EBITDA margin of 11.5% to 12.5% (10.7% for 2013)

– Assumed a 2% reduction in cash SG&A expenses as a percent of revenues

– Improvement assumed higher staffing consultant productivity, greater economies of scale & higher efficiency from

integration / consolidation initiatives

• Cumulative Free Cash Flow of $675 million

($ in Millions) 2018 Financial Status

Targets1

Low / High

Revenues $3,000

Gross Profit 930 / 960

Adjusted EBITDA 345 / 375

Gross Margin2 31.0% / 32.0%

Adjusted EBITDA Margin 11.5% / 12.5%

Conversion of GP into Adj. EBITDA 37.1% / 39.1%

Cumulative Free Cash Flow $675

1 Financial goals for 2018 as set forth in the 5-Year Strategic Plan (2018 was the final year of the 5-Year Plan). 2 Gross margin target applied to our core business only.

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